What changed in this filing

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Item 2. Properties

2025-03-05 compared with 2024-03-07 · 52 added, 42 removed, 349 unchanged (21% of the section changed)

6 unchanged sentences

We believe that there is significant value to be created by drilling the undeveloped opportunities on our properties.

As of December 31, 2023, we owned interests in a total of 76,484 gross (65,462 net) developed acres and operate the vast

majority of our acreage position.

As of December 31, 2024, we owned interests in a total of 76,284 gross (65,342 net) developed acres and operate the vast majority of our acreage position.

In addition, as of December 31, 2024, we owned interests in approximately 21,315 gross (15,577 net) undeveloped acres.

1 unchanged sentence

Within the Northwest Shelf, we have a total of 35 proved undeveloped locations (100% horizontal) and 3 PDNP opportunities based on the reserve report as of December 31, 2024.

Our reserve estimates account for the capital costs required to develop these wells and the future plugging and abandonment cost.

Our reserve estimates account for the capital costs required to develop these wells and the future plugging and abandonment costs.

We believe the Northwest Shelf leases contain additional potential drilling locations.

Within the Central Basin Platform, we had a total of 176 proved undeveloped locations (13% horizontal and 88% vertical) and 217 PDNP opportunities based on the reserve report as of December 31, 2024.

Our reserve estimates account for the capital costs required to develop these wells.

Our reserve estimates account for the capital costs required to develop these wells and the future plugging and abandonment costs.

We believe the Central Basin Platform leases contain additional potential drilling locations.

8 unchanged sentences

As of December 31, 2024, the Company had interests in approximately five gross vertical and 151 gross horizontal producing wells, of which we operate five vertical and 116 horizontal wells.

The horizontal wells predominately produce from the San Andres conventional reservoir and the verticals produce from Wolfcamp and Devonian reservoirs.

Central Basin Platform - Andrews, Gaines, Crane, Ector, Winkler, and Ward Counties, Texas – In 2011, we acquired a 100% working interest and a 75% net revenue interest in our initial leases in Andrews and Gaines counties.

The horizontal wells predominately produce from the San Andres conventional reservoir and the verticals produce from Wolfcamp reservoir.

Central Basin Platform – Andrews, Gaines, Crane, Ector, Winkler, and Ward Counties, Texas – In 2011, we acquired a 100% working interest and a 75% net revenue interest in our initial leases in Andrews County.

Since that time, we have acquired working and net revenue interests in additional producing leases and acquired additional undeveloped acreage in and around our Andrews County and Gaines County leases.

3 unchanged sentences

As of December 31, 2024, the Company had interests in approximately 581 gross vertical and 198 gross horizontal producing wells, of which we operate 470 vertical and 196 horizontal wells.

The horizontal wells predominately produce from the San Andres conventional reservoir and the verticals produce from a variety of conventional pay sands including Holt, Glorieta, Clear Fork, Wichita Albany, Tubb, Wolfcamp and Devonian reservoirs .

The horizontal wells predominately produce from the San Andres conventional reservoir and the vertical wells produce from a variety of conventional pay sands including Holt, Glorieta, Clear Fork, Wichita Albany, Tubb, Wolfcamp and Devonian reservoirs .

Title to Properties

6 unchanged sentences

Summary of Oil and Natural Gas Reserves

As of December 31, 2023, our estimated proved reserves had a pre-tax PV-10 value (present value discounted at 10%) of approximately $1,647.0 million and a Standardized Measure of Discounted Future Net Cash Flows of approximately $1,399.2 million, over 99.6% of which relates to our properties in the Permian Basin in Texas.

As of December 31, 2024, our estimated proved reserves had a pre-tax PV-10 value (present value discounted at 10%) of approximately $1,462.8 million and a Standardized Measure of Discounted Future Net Cash Flows of

approximately $1,232.9 million, over 99.7% of which relates to our properties in the Permian Basin in Texas.

We spent approximately $391.6 million on acquisitions and capital projects during 2024 and 2023.

9 unchanged sentences

80,904,071 149,817,162 28,303,085 134,176,684 $ 1,462,827,136 $ 1,232,936,343

_____________________________

(1) Six Mcf is deemed the equivalent of one Boe.

5 unchanged sentences

PV-10 is not a measure of financial or operational performance under GAAP, nor should it be considered in isolation or as a substitute for the standardized measure of discounted future net cash flows as defined under GAAP.

The table below provides a reconciliation of PV-10 to the standardized measure of discounted future net cash flows ( in thousands ):

The table below provides a reconciliation of PV-10 to the standardized measure of discounted future net cash flows:

Present value of estimated future net revenues (PV-10) $ 1,462,827,136

22 unchanged sentences

Balance, December 31, 2024 80,904,071 149,817,162 28,303,085 134,176,684

_____________________________

(1) Six Mcf is deemed the equivalent of one Boe.

(2) At year-end 2022, we began reporting reserves on a three-stream basis, including NGLs separately from natural gas.

Revisions represent changes in previous reserves estimates, either upward or downward, resulting from new information normally obtained from development drilling and production history, five year rule and/or resulting from a change in economic factors, such as commodity prices, operating costs or development costs.

Revisions represent changes in previous reserves estimates, either upward or downward, resulting from new information normally obtained from development drilling and production history, a rule that undeveloped reserves must be drilled within five years of originally being booked, and/or resulting from a change in economic factors, such as commodity prices, operating costs or development costs.

Notable changes in proved reserves for the year ended December 31, 2024 included the following:

• Extensions.

In 2023, extensions of 4.8 MMBoe were primarily the result of the successful operated drilling program and non-operated activity in the Northwest Shelf and Central Basin Platform.

In 2024, extensions of 16.0 MMBoe were primarily the result of the successful operated drilling program in the Northwest Shelf and Central Basin Platform.

• Purchase of minerals in place.

In 2023, the Company completed the acquisition of Founders oil and gas leases and related property within Ector County that resulted in 8.2 MMBoe in additional reserves.

In 2024, the Company did not purchase any additional reserves.

• Sales of minerals in place.

In 2023, the Company sold 5.7 MMBoe from the divestiture of the Delaware Basin assets (30%), the New Mexico operated assets (57%), and part of the Company's assets in Gaines County (13%).

In 2024, the Company sold 1.2 MMBoe from the divestiture of certain oil and gas properties, including vertical wells and associated facilities, within the Central Basin Platform in Andrews and Gaines Counties.

• Revision of previous estimates.

In 2023, the negative revisions of prior reserves of 9.0 MMBoe consisted of 5.3 MMBoe (59%) related to changes in price and 3.7 MMBoe (41%) related to changes in performance and other economic factors.

In 2024, the negative revisions of prior reserves of 3.2 MMBoe consisted of a positive 0.2 MMBoe related to changes in price (including differentials and gathering related contract change that effects differentials), offset by a negative 3.4 MMBoe related to changes in performance and other economic factors.

Our proved oil, natural gas, and natural gas liquid reserves are shown below.

28 unchanged sentences

Standardized Measure of Discounted Future Net Cash Flows

December 31, 2023 2022 2021

As of December 31, 2024 2023 2022

Future cash inflows $ 6,165,487,616 $ 6,622,410,752 $ 9,871,961,000

45 unchanged sentences

Proved Reserves

As of December 31, 2023, we had approximately 129.8 MMBoe (one million Boe) of proved reserves, consisting of approximately 63% oil, 19% natural gas, and 18% NGLs, as summarized in the table above.

As of December 31, 2024, we had approximately 134.2 MMBoe of proved reserves, consisting of approximately 60% oil, 19% natural gas, and 21% NGLs, as summarized in the table above.

Our reserve estimates have not been filed with any Federal authority or agency (other than the SEC).

As of December 31, 2023, approximately 68% of the proved reserves have been classified as PD and the remaining 32% are PUD.

As of December 31, 2023, our total proved reserves had a net pre-tax PV-10 value of approximately $1,647.0 million and a Standardized Measure of Discounted Future Net Cash Flows of approximately $1,399.2 million.

Approximately $1,262.7 million and $1,072.7 million, respectively, of total proved reserves are associated with the PD reserves, which is approximately 77% of the total proved reserves’ pre-tax PV-10 value.

The remaining $384.4 million and $326.5 million, respectively, are associated with PUD reserves.

As of December 31, 2024, approximately 69% of the proved reserves were classified as PD and the remaining 31% were PUD.

As of December 31, 2024, our total proved reserves had a net pre-tax PV-10 value of approximately $1,462.8 million and a Standardized Measure of Discounted Future Net Cash Flows ("SMOG") of approximately $1,232.9 million.

Approximately $1,130.2 million pre-tax PV-10 and $952.6 million SMOG, respectively, of total proved reserves are associated with the PD reserves, which is approximately 77% of the total proved reserves’ pre-tax PV-10 value.

The remaining $332.7 million pre-tax PV-10 and $280.4 million SMOG, respectively, are associated with PUD reserves.

Proved Undeveloped Reserves

Our reserve estimates as of December 31, 2024 include approximately 41.6 MMBoe as PUDs.

As of December 31, 2022, our reserve estimates included approximately 48.0 MMBoe as proved undeveloped reserves.

As of December 31, 2023, our reserve estimates included approximately 41.6 MMBoe as PUDs.

In accordance with our December 31, 2024 year-end independent engineering reserve report, we plan to drill our PUD drilling locations within five years of original classification.

5 unchanged sentences

• Extensions.

In 2023, extensions of 3.7 MMBoe were primarily the result of the successful operated drilling program and non-operated activity in the Northwest Shelf and Central Basin Platform.

In 2024, extensions of 12.8 MMBoe were primarily the result of the successful operated drilling program in the Northwest Shelf and Central Basin Platform.

• Purchase of minerals in place.

In 2023, we completed the acquisition of Founders oil and gas leases and related property within Ector county that resulted in 3.7 MMBoe in additional reserves.

In 2024, we did not purchase any additional reserves.

• Sales of minerals in place.

In 2023, we sold 1.3 MMBoe from the divestiture of the New Mexico operated assets (81%), and a subset of our assets in Gaines County (19%).

In 2024, we sold 0.1 MMBoe from the divestiture of certain oil and gas properties within the Central Basin Platform.

• Revision of previous estimates.

In 2023, the negative revisions of prior reserves of 4.9 MMBoe consisted of 0.8 MMBoe (16%) related to changes in price and 4.1 MMBoe (84%) related to changes in performance and other economic factors.

In 2024, the negative revisions of prior reserves of 5.6 MMBoe consisted of a positive 0.2 MMBoe (4%) related to changes in price (including differentials and gathering related contract change that effects differentials) offset by a negative 5.8 MMBoe (104%) related to changes in performance and other economic factors.

The following table indicates projected reserves that we currently estimate will be converted from proved undeveloped to proved developed, as well as the estimated costs per year involved in such development.

Our PUD reserves are part of a management adopted development plan that schedules PUD reserves to be developed within five years of initial disclosure as proved reserves.

As of December 31, 2023, no material amount of proved undeveloped reserves were not scheduled to be converted to proved developed status within five years they were initially disclosed.

As of December 31, 2024, no material amount of proved undeveloped reserves were not scheduled to be converted to proved developed status within five years of when they were initially disclosed.

Estimated Costs Related to Conversion of Proved Undeveloped Reserves to Proved Developed Reserves

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Meekins meets or exceeds the education, training, and experience requirements set forth in the Standards Pertaining to the Estimating and Auditing of Oil and Gas Reserves Information promulgated by the Society of Petroleum Engineers;

he is proficient in judiciously applying industry standard practices to engineering and geoscience evaluations as well as applying SEC and other industry reserve definitions and guidelines.

he is proficient in applying industry standard practices to engineering and geoscience evaluations as well as applying SEC and other industry reserve definitions and guidelines.

The proved oil and natural gas reserves disclosed in this Annual Report are based on reserve estimates determined and prepared by our independent reserve engineers primarily using decline curve analysis to determine the reserves of individual producing wells.

2 unchanged sentences

These wells were considered to be analogous based on production performance from the same formation and completions using similar techniques.

The technologies and economic data used to estimate our proved reserves include, but are not limited to, well logs, geological maps, seismic data, well test data, production data, historical price and cost information and property ownership interests.

This data was reviewed by various levels of management for accuracy before consultation with our

independent reserve engineers.

ownership interests.

This data was reviewed by various levels of our management for accuracy before consultation with our independent reserve engineers.

This consultation included review of properties, assumptions, and available data.

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Each quarter, the Corporate Reserves team along with the Executive Vice President of Engineering and Corporate Strategy presents the status of the Company’s reserves to senior executives, and subsequently obtains approval of significant changes from key executives.

Additionally, our five-year PUD development plan is reviewed and approved annually by the Company’s Chief Executive Officer, Chief Financial Officer, Executive Vice President of Operations, and the Executive Vice President of Land, Legal, Human Resources, and Marketing.

Additionally, our five-year PUD development plan is reviewed and approved annually by the Company’s Chief Executive Officer;

Chief Financial Officer;

Executive Vice President of Engineering and Corporate Strategy;

Vice President of Operations;

Executive Vice President, Exploration and Geosciences;

and Vice President, General Counsel.

The Corporate Reserves department works closely with independent reserve engineers from CGA at each fiscal year end to ensure the integrity, accuracy, and timeliness of annual independent reserves estimates.

These independently developed reserves estimates are presented to the Audit Committee.

In addition to reviewing the independently developed reserve reports, the Audit Committee also periodically meets with the independent reserve engineers that prepare estimates of proved reserves.

In addition to reviewing the independently developed reserve reports, the Audit Committee also meets with CGA annually at a minimum.

Summary of Oil and Natural Gas Properties and Projects

73 unchanged sentences

$ 0.07 $ 0.07 $ 0.41

Ad valorem taxes

Ad valorem taxes (including methane tax) $ 1.12 $ 1.02 $ 1.04

Methane tax (2)

$ 0.07 $ — $ —

Ad valorem taxes (excluding methane tax) $ 1.05 $ 1.02 $ 1.04

Production taxes

$ 2.24 $ 2.74 $ 3.80

(2) In accordance with the IRA, the EPA implemented a waste emission charge ("WEC") on methane emitted from applicable oil and gas facilities that exceed certain thresholds.

The methane charge became effective in 2024 at $900 per metric ton of methane, and is set to increase to $1,200 per metric ton of methane for 2025, and $1,500 per metric ton of methane by 2026 and thereafter.

For the year ended December 31, 2024, we accrued for $527,687 in methane taxes within Ad valorem taxes in our Statements of Operations.

The average oil sales price amounts above are calculated by dividing revenue from oil sales by the volume of oil sold, in Bbls.

5 unchanged sentences

The following table presents our ownership as of December 31, 2024 in productive oil and natural gas wells (a net well is our percentage ownership of a gross well).

Over 99.8% of such wells are in the Permian Basin in Texas.

Approximately 99.8% of such wells are in the Permian Basin in Texas.

Oil Wells Gas wells Total Wells

1 unchanged sentence

914 746 21 17 935 763

Drilling Activity

Drilling Activities

During 2024, as operator, we drilled a total of 44.00 gross (43.94 net) wells.

Of this, 14.00 gross (12.75 net) horizontal San Andres wells were in the Northwest Shelf (nine 1.0-mile laterals and five 1.5-mile laterals.) and 17.00 gross (17.00 net) wells were in the Central Basin Platform, of which six were horizontal San Andres wells in Andrews County, Texas (two 1.0-mile laterals and four 1.5-mile laterals) and 11.00 were vertical wells in Crane County, Texas.

In addition, we also participated in five gross (0.59 net) non-operated wells of which three were Northwest Shelf and two in Central Basin Platform.

Of this, 5.00 gross (4.94 net) horizontal San Andres wells were in the Northwest Shelf in Yoakum County (four 1.0-mile laterals and one 1.5-mile lateral) and 39.00 gross (39.00 net) wells were in the Central Basin Platform, of which seventeen were horizontal San Andres wells in Andrews County and Crane County, Texas (all 1.0-mile laterals) and 22.00 were vertical wells in Crane County, and Ector County, Texas.

These wells were successful and there were no dry wells (1) .

6 unchanged sentences

Productive (1)

43.00 42.94 31.00 29.75 32.00 31.35

Dry — — — — — —

1 unchanged sentence

Dry — — — — — —

(1) One of the 44.00 drilled wells has been drilled but not yet completed as of December 31, 2024.

The table below contains information regarding the number of non-operated wells drilled and participated in during the periods indicated.

9 unchanged sentences

Present Activities

We had no operated wells in the process of being drilled or completed as of December 31, 2023.

We had one operated well waiting on completion as of December 31, 2024.

Cost Information

We conduct our oil and natural gas activities entirely in the United States.

As noted in the table under “Production Prices and Production Costs”, our average production costs including lease operating expenses, gathering, processing and transportation ("GPT") and ad valorem, per Boe, were $11.70 and $12.02 for the years ended December 31, 2023 and 2022, respectively, and our average production taxes, per Boe, were $2.74 and $3.80 for the years ended December 31, 2023 and 2022, respectively.

As can be calculated from the table under “Production Prices and Production Costs”, our average production costs including lease operating expenses, gathering, transportation and transportation ("GTP") and ad valorem, per Boe, were $12.08 and $11.70 for the years ended December 31, 2024 and 2023, respectively.

As shown in the aforementioned table, our average production taxes, per Boe,

were $2.24 and $2.74 for the years ended December 31, 2024 and 2023, respectively.

These amounts are calculated by dividing our total production costs or total production taxes by our total volume sold, in Boe.

11 unchanged sentences

Those offices now serve as an operations office.

Our office space lease in Tulsa, Oklahoma was terminated as of March 31, 2021.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 2. Properties